Supply Finally Rises to Meet Industrial Demand
The site provides 1,500 feet of Katy Freeway visibility to 46,032 vehicles daily and is the first development in the 106.6-acre Pederson Distribution Park, situated between Brookline, Pederson and I-10.
HOUSTON—Driving Katy Freeway west to Austin or San Antonio, it’s hard not to marvel at the giant industrial buildings anchoring the prairie. While 840,000 square feet is the average size of the 10 largest industrial buildings on the Katy/Interstate 10, these properties are typically distribution centers serving the 16 million people who live within a 200-mile radius.
Clay Development and Construction is breaking ground this month on the first distribution center, a 621,920-square-foot spec building, in the 106.6-acre Pederson Distribution Park. The site is just west of the Love’s truck stop on Pederson Road and east of the Igloo complex in Waller County in the Katy/West Houston submarket.
The new building will be completed in August 2019. The site provides 1,500 feet of Katy Freeway visibility to 46,032 vehicles daily. With access via Pederson Road and Highway 90, Pederson Distribution Park is situated between Brookline and Pederson roads, and bounded on the south by Interstate 10. It is 12 minutes from the Grand Parkway/Highway 99 and 3 minutes from Houston Executive Airport. The site allows for an additional 1 million square feet of industrial space.
“At 622,000 square feet, Pederson Distribution Center I is right-sized for the Katy market, where Amazon, Academy, Rooms to Go and Igloo occupy 1 million to 1.7 million-square-foot mega-distribution centers,” says Robert Clay, president of Clay Development and Construction. “In the last 10 years, the average size of new buildings here has been 840,000 square feet. The area serves a population of 16 million within a 200-mile radius. Retailers and distributors are looking for locations in the area to capitalize on the 12% population growth since 2010. We are meeting that demand with state-of-the-art distribution space in a high-visibility, highly accessible location.”
John Simons, Gray Gilbert and Chris Haro of NAI Partners, in addition to Charlie Christ of Clay Development and Construction, will handle leasing of the building. Construction financing is by Frost Bank. Clay is providing construction and architecture for the development. The firm purchased the land for this project three years ago and now sees the incentive for development.
“There wasn’t enough demand in this area until recently,” Clay tells GlobeSt.com. “Every building that has been built there is taken and there isn’t really much land available for new projects.”
Pederson Distribution Center I is a cross-dock distribution facility with 36-foot clear-height ceilings, 70-foot speed bays, 147 9-by-10-foot dock-high doors and four drive-in ramps with 14- by 16-foot overhead doors. The project will have two 130-foot truck courts, up to 256 employee parking spots and the option of 170 trailer parking spots. The distribution park is a professionally managed and deed-restricted development with a regional water detention program and an ESFR fire sprinkler system.
The industrial market continues to show steady activity, according to NAI Partners. At the end of the fourth quarter, the vacancy rate remained at 5.4% from this time last month. Year-to-date net absorption continues to rise, up 16.7% from last month to 8.6 million square feet. Additionally, there has been 22.8 million square feet of leasing activity as of year-end. All the while, the average asking rate of renting industrial space stayed at $0.61 in December, remaining steady during the last 30 days of the year.